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TheStreet Open House

Why I Will Read Greg Smith's Goldman Sachs Tell-All

NEW YORK ( TheStreet) -- Former Goldman Sachs (GS - Get Report) executive Greg Smith has scored his big payday in the publishing world, nabbing what the New York Post reported to be a mind-boggling $1.5 million book deal for the hatchet job he did on the bank with a unit of Hachette Book Group.

Smith shot to sudden fame earlier this month with the vitriolic op-ed he penned for The New York Times, titled Why I Am Leaving Goldman Sachs, and calling out the current heads of the firm as masterminds of a toxic and destructive capitalist culture.

While the Post suggests with its "mind-boggling" description of the price tag for the book deal that the publishers are being treated by Smith like Goldman treats its clients, you don't have to be a Muppet to want to read Smith's Goldman tell-all.

The publishers may have overpaid, but anyone among the 99% that's interested in whether Smith can back up his claims should want to read this book.

Smith's op-ed was a broad brushstroke that anyone who lived through the financial crash could have assumed to be the truth about Goldman, so now it's time for details.

The peanut gallery has certainly been divided over whether Smith is a defender of a higher order of capitalism, a Wall Street version of the tobacco industry whistle-blower, a hypocrite , or just a disgruntled employee.

The most damning, and most quoted, piece of evidence in the Smith op-ed was the fact that Goldman executives referred to clients as "Muppets." Which Goldman executives? Does Smith have emails sent by Goldman CEO Lloyd Blankfein with the subject line: How to fleece the Muppets?

Anyone who has spent more than 90 seconds with an investment banker learns pretty quick that it's a high-priced, well-heeled version of a locker room, with the combatants beating their chests and often engaging in foul-mouthed master-of-the-universe rhetoric.

So who exactly called who a "Muppet" and where is the trail of evidence proving that the "Muppet" philosophy was institutionalized at Goldman, handed on down from the top?

There's plenty of reason to suspect Smith is right, but suspicion doesn't cut it. On the other hand, there's no way that anyone should allow the embarrassing argument that Goldman is in the business of making money decide the case against Smith either. That's the kind of simple-minded defense of capitalism that is as broad and unconvincing as the Smith op-ed.

So Mr. Smith is going to the publishing world, and it's time to back up his claims. If it's not worth $1.5 million to the publishers in terms of how many people will pay to read Smith's story, it's about the only way that Smith can ever claim moral victory. If the legal terms of his employment make it impossible for Smith to offer up a paper trail as he names names, then the book is a non-starter as far as I'm concerned.

In the least, there is reason to play devil's advocate to an executive who predicts doom for the investment bank based on the predatory practices he observed during a total of twelve years' services, considering the history of Goldman , founded 143 years ago in 1869, which includes a long line of dubious capitalist practices that pre-date Smith and can make his view of the firm seem myopic, as well as narcisistic.

The headlines noted on the day of the Smith op-ed that Goldman lost $2.2 billion in market cap in one market session, as if that meant victory for the former employee over the bank. Today, Goldman shares have more than rebounded from that one-day drop. Now Smith needs to make a deliberate, convincing, blow-by-blow winning argument.

-- Written by Eric Rosenbaum from New York.

>To contact the writer of this article, click here: Eric Rosenbaum.

>To follow the writer on Twitter, go to Eric Rosenbaum.

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